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DAVID GREGORY, HOST: Tonight, soaring gas prices and the war of words over oil, the energy crisis that has found its way to the center of the campaign. So where are the votes?

THE RACE FOR THE WHITE HOUSE rolls on.

And welcome to THE RACE. I‘m David Gregory. Happy to have you here, your stop for the fast-paced, the bottom line and every point of view in the room.

This campaign marches on even as those of us here at NBC News are still trying to put one foot in front of the other after the loss of our friend Tim Russert. Today in Washington, at St. Albans School for Boys, Luke Russert‘s school, a public wake for Tim.

Well-wishers, including the president, you see there. And thousands of regular Washingtonians who simply wanted to pay their respects.

And it warms all of our hearts to see that.

Tonight, here, we move on, covering the campaign. And we‘re going to o inside the War Room to talk about McCain‘s sidestep from President Bush.

And there are also new poll numbers out tonight ranking these candidates on the issues.

And in “Three Questions” tonight, four years after President Bush used the war on terror to beat John Kerry, has the debate shifted now, favoring Democrats this year?

The bedrock of this program, as you know, a panel that always comes to play.

And with us tonight, John Harwood, chief White House correspondent for CNBC and political writer for “The New York Times”; Tony Blankley; syndicated columnist; Stephen Hayes, senior writer with “The Weekly Standard”; and Rachel Maddow, host of “The Rachel Maddow Show” on Air America and an MSNBC political analyst who was good enough to be here for me last night.

Rachel, thank you.

RACHEL MADDOW, MSNBC POLITICAL ANALYST: Sure, David.

GREGORY: We begin as we do every night, with everyone‘s take on the most important political story of the day. It is “The Headline.”

I‘ll get us started here tonight. My headline, “Desperate to Drill.”

With gas prices soaring, John McCain risks the ire of environmental groups today, calling for offshore oil drilling to boost domestic supply. It is a switch in his position from his first White House run.

Listen.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: And with gasoline running at more than $4 a barrel—a gallon—a gallon. I wish the good old days -- $4 a gallon, many do not have the luxury of waiting on the far-off plans of futurists and politicians.

We have proven oil reserves of at least 21 billion barrels in the United States. But a broad federal moratorium stands in the way of energy exploration and production. And I believe it is time for the federal government to lift these restriction and to put our own reserves to use.

GREGORY: Obama, who has called McCain‘s gas tax holiday a gimmick, has also dismissed this idea as well, saying there is “... no way that allowing offshore drilling would not lower oil prices,” not in about five years or so, that it would take for it to actually come into effect.

So, with voters saying gas prices outranks national security at this point in voters‘ minds, the energy fight is certainly the new battleground tonight.

Rachel, your headline has to do with this as well today. And McCain again risking support from environmental groups, as with the other aspects of his environmental and energy policy.

Your headline.

MADDOW: My headline tonight, David, thanks, is that “McCain is Giving up on the Green Vote, Apparently.”

Either the McCain campaign‘s messaging today was so mystifyingly genius that it is above my head, or he just announced that he‘s dropping his opposition to offshore drilling on the same day he put out his eco warrior, anti-global warming TV ad. Are these messages supposed to cancel each other out? Is he trying to re-brand offshore oil drilling as a friend of the Earth thing? Is it a play to impress the middle of the country by insulting Florida and California and other coastal states that don‘t want this?

Either this is a total genius day of political messaging or it is really, really, really bad messaging today.

GREGORY: Tony Blankley, you‘ve also got your head on the energy policy here. You‘re ready to take Obama to task.

I find it surprising that Obama wants to defy the principles of the way the world works. And if you tax something, you‘ll get less of it. If you produce something, you‘re going to get more.

We have a long term, a middle term and a short term energy oil shortage. And I think that McCain is in the right place. He‘s looking out to be able to get to the point in five, seven years when we‘re going to have a lot more oil, which we‘re going to need. And for Obama to say five years, forget about it, the job of a president is to look forward.

GREGORY: Indeed, it is. And in fact, McCain talked about Obama and the tax issue as well. I think we have that sound.

(BEGIN VIDEO CLIP)

MCCAIN: He wants a windfall profits tax on oil to go along with the new taxes he also plans for coal and natural gas.

AUDIENCE: Boo!

MCCAIN: My friends, if the plan sounds familiar, it‘s because that was President Jimmy Carter‘s big idea, too.

AUDIENCE: Boo!

MCCAIN: And a lot of good it did us. I‘m all for recycling, but it‘s better applied to paper and plastic than the failed policies of the 1970s.

(END VIDEO CLIP)

GREGORY: All right. You see the positioning there for sure. Obviously John McCain wants to be the idea guy on energy. And at this point you‘ve got Obama trying to take on some of these ideas and take on this notion of what the Bush position was as well.

Since wrapping up his party‘s nomination, Barack Obama has set out to systematically defuse a potential political time bomb—the idea he‘d be a tax-raising, trade-blocking, job-killing Democrat who would make the economy even worse than it is right now.

A week ago, he told me he might defer some tax increases on the rich. Yesterday, he told a Michigan audience that America must embrace globalization. And now he tells “The Wall Street Journal” he might even cut corporate tax rates.

Obama does favor higher taxes and more spending in general than John McCain, but as swing voters wonder whether he can campaign as a modern, practical Democrat, his answer is clear. Yes, we can.

GREGORY: OK.

And Steve Hayes, tonight you‘re looking at this debate that won‘t go away because both candidates want it. They want to have this fight over national security. And it‘s coming up again today.

example of Guantanamo. What we know is that in previous terrorist attacks

for example, the first attack against the World Trade Center—we were able to arrest those responsible, put them on trial. They are currently in U.S. prisons, incapacitated.

(END VIDEO CLIP)

HAYES: Well, they are not all currently in U.S. prisons, incapacitated. There was a factual error there. The McCain campaign is jumping all over this, saying that that‘s a gaffe, and also pointing to the fact that in June of 1998, 10 years ago, it was the anniversary of Osama bin Laden‘s indictment and he is still on the loose.

GREGORY: All right. We‘re going to pick up on this as we get into “Three Questions,” the big picture question and debate over the war on terror.

We‘re going to take a break here and come back, go inside the War Room, and look at the new ad that John McCain is using to separate himself from President Bush. He wants to put those Independents on notice that he‘s going to use the environmental issue, as Rachel brought up, to try and get some distance from the president.

Later on, your turn to play with the panel. Call us, 212-790-2299, or e-mail us at
race08@msnbc.com.

GREGORY: We‘re back on THE RACE. We‘re going inside the War Room to look at what‘s going on behind the curtains here of these campaigns as they take each other on—tactics, strategy, what‘s working and what isn‘t.

Back with us, John Harwood, Tony Blankley, Stephen Hayes and Rachel Maddow.

Topic number one, McCain sidesteps Bush in a new ad on the environment. He‘s talking about climate change here.

Watch.

(BEGIN VIDEO CLIP)

NARRATOR: John McCain stood up to the president and sounded the alarm on global warming five years ago. Today he has a realistic plan that will curb greenhouse gas emissions, a plan that will help grow our economy and protect our environment.

Reform, prosperity, peace. John McCain.

(END VIDEO CLIP)

GREGORY: You know, Steve Hayes, we have to remind ourselves this isn‘t 2000 here, he‘s not taking Bush on the way he was. But he is. He‘s talking to Independent voters here who don‘t like Bush on the environment.

HAYES: Yes. And I think going forward, we‘re going to see that John McCain is in many ways actually taking on George W. Bush.

Look, this is sort of classic Clinton-style triangulation. John McCain—and I think we‘ll see this again and again and again. Not just on energy, not just on the economy, not just on national security. He will say, look, I‘m not George W. Bush, but I‘m not Barack Obama either.

GREGORY: Yes. Right. Right.

HAYES: And try to divide—you know, end up somewhere in the middle.

GREGORY: Let‘s look at this from the reporting of Elizabeth Bumiller in “The New York Times” today looking at this question of weather McCain and Bush are close on the environmental issue.

Bumiller reports it this way: “Mr. McCain, who has a mixed record on the environment in the Senate, he has missed votes on toughening fuel economy standards and has opposed tax breaks meant to encourage alternative energy, has nonetheless tried to highlight what he considers his stark environment divide with Mr. Bush.”

Rachel, you took him on, on this question, but on the environment, this is fertile ground for McCain to say, I do have a break from Bush, particularly on global warming.

MADDOW: But if he‘s going to declare the environment to be his strength, he‘s got to be able to defend his record on the environment. And his environmental record, even just on the issue, for example, of offshore drilling, is incredibly all over the place.

I mean, he‘s voted for it, against it, both within the last just six years. He‘s now coming out strongly in favor of it. And he‘s saying that it‘s a strong, principled position that he‘s always had.

I think honestly, if you break it down, the reason that McCain has had kind of an all over the place record on the environment is that he hasn‘t really focused on it. It hasn‘t really been the centerpiece of what he‘s worked on in the Senate. And so his record sort of reflects that fact. If he‘s going to run on it now, he‘s going to have to come up with a better story to explain why his record isn‘t (ph) the same.

HARWOOD: I just wanted to say, I think we do have a new context though for this debate given what‘s going on with gas prices and the energy market now.

GREGORY: Yes.

HARWOOD: And so I don‘t think it‘s unreasonable for John McCain to say—to separate himself from Bush by saying no, I‘m not for drilling in ANWR, yes, I‘m for caps on carbon emissions. But in the quest for new oil, I‘m willing to leave it up to states to make that decision. I don‘t think that‘s necessarily a bad...

His strategist David Axelrod was responding to some criticism about this here on MSNBC. This is what he said.

(BEGIN VIDEO CLIP)

DAVID AXELROD, OBAMA STRATEGIST: The photo-op is what we wanted to avoid. We didn‘t want to be involved in a kind of campaign circus, which is what the McCain campaign really appeared to be promoting. This notion that wisdom accrues based on the number of visits that you make I think is not really true.

GREGORY: So, Tony, McCain has been taking Obama on, on this idea of going to Iraq, seeing firsthand what‘s going on on the ground before he makes some hard and fast policy. Who‘s winning this debate right now?

BLANKLEY: I think McCain is. Obama is making the best case he can for the problem he has for not having gone there. So now they‘re kind of falling and they admit they have to go...

GREGORY: Yes.

BLANKLEY: ... which is what McCain has been pressuring him to do. So they are doing it and saying, but we don‘t want to be a photo-op, which is why we haven‘t gone. I think it‘s the best they can do with the facts they have, but they were set up for this problem because he hadn‘t been going enough and hadn‘t shown the leadership on Iraq, other than opposing it in the beginning.

So I think McCain picks up a little bit on this one.

GREGORY: Steve, both these guys need a commander in chief moment, and they can get it on the ground in Iraq by being engaged, being involved. And they have got different positions on this, but they are both sort of taking on the status quo there in one way or the other. Obama needs that photo-op, to some degree.

HAYES: Yes, I think he does. In fact, I‘m surprised a little bit that Barack Obama didn‘t use a trip, and a trip this summer, very soon, to go to Iraq, to meet with the generals, to see David Petraeus and to say, look, I am for pulling out. I‘ve been for pulling out, I was opposed to this war from the beginning, I‘ve been consistent on it ever since. But we need to do this in a responsible way, and after talking to the generals, I think, you know, we have to be very careful about how we do this. We don‘t want to get out of Iraq as poorly as we got in.

That could have been a pretty effective argument. I‘m a little bit surprised that he actually hasn‘t taken the opportunity to make that argument.

HARWOOD: It sounds like that‘s what they‘re cooking up right now though.

You‘re right though, Steve, that he needs to pair that with the visual. And it seems like he‘s on his way to do that.

GREGORY: All right. Let‘s move on. Let‘s talk about domestic politics and the play for Michigan.

Second day of campaigning there for Obama. Hit McCain on education today. Listen to this.

(BEGIN VIDEO CLIP)

OBAMA: When it comes to education, Senator McCain, I believe, is out of touch with the situation of many hard working Americans. A couple of years ago, he even voted against funding for students so he could protect billions of dollars in corporate tax loopholes. That‘s not the kind of change that I think the people in Michigan are looking for.

(END VIDEO CLIP)

GREGORY: All right. So John Harwood, here are the facts about Michigan.

The Democrats have won it narrowly in the last two election cycles. Obama didn‘t campaign there before because of the DNC rules. He didn‘t have a ground game.

Now he gets the endorsement of Gore, he gets the endorsement of Edwards. And don‘t forget, everybody, that this is the place that he holds up as saying, I spoke truth to power. I went in there, into Detroit and told the auto manufacturers that we have to change the way we do business.

What‘s the game plan for him in Michigan here?

HARWOOD: Well, look, he‘s behind there right now. This is one of the rare states.

People have talked about his trouble in Ohio. He‘s ahead of John McCain there. His trouble in Pennsylvania, he‘s ahead of John McCain there. But he‘s behind in Michigan.

You also can‘t overlook the difficulties of that incumbent Democratic governor, Jennifer Granholm situation. Very difficult budget situation.

GREGORY: Right.

HARWOOD: Had tax increases. That‘s not helping him. This could be the toughest of those Midwestern states for him to win.

GREGORY: And this is one that he wants to keep in his column, Tony. And he knows that with an unpopular governor, those Reagan Democrats who may already be inclined to be looking around past Obama might be ripe for the taking.

BLANKLEY: Yes, I have—yes, maybe it‘s just my memory as a Republican over the years. I‘ll be a little surprised if at the end of the day, Michigan is in the Republican line—side of the vote.

GREGORY: Yes.

BLANKLEY: I mean, it could be close. And it may well be close. But we haven‘t won it in a long time.

GREGORY: Well, you know, what struck me, Rachel, is the front page of “The Wall Street Journal” today. Flint, Michigan is the dateline, and Obama is talking about his economic plans, talking about, yes, I‘m a free trader, but I want to eliminate this winner-take-all economy that just benefits the rich. I want to talk about the impact of trade on working people and the American worker, and adjust some of those imbalances.

That is a message that‘s tailor-made for the economy of Michigan.

MADDOW: And to be saying that and raising the prospect that he might also lower corporate income tax rates, or corporate tax rates.

MADDOW: I mean, it was a very Michigan-centric message. It kind of had something for everybody.

And I think it‘s important that you played that clip of him on education. Education is one of these great issues that can appeal in terms of dividing Democrats from Republicans when you‘re talking to blue collar voters who aren‘t very ideologically motivated. I mean, Republicans don‘t believe in very much federal funding for education. Democrats do. It‘s one of those things where you can say, here‘s a real big difference between the parties, that something that might appeal to people who don‘t already have a partisan affiliation, coming from a Democratic candidate.

GREGORY: I‘m going to take a break here.

Michigan is going to be one that the Democrats want to hold. Florida is one that McCain wants to hold. Interesting that the issue on gas taxes, prices and drilling and so forth may have created an opening for Obama there.

We‘re going to come back. “Smart Takes” next. More on the gas price issue and how these two parties, these two candidates want to mix it up on energy, when THE RACE comes back.

(COMMERCIAL BREAK)

GREGORY: Time now for “Smart Takes.”

More on some of the polling. We want to get your warmed up here. We have some new poll numbers in our next segment at the half hour.

To look at all the issues, back with us, John, Tony, Stephen and Rachel.

This “Smart Take” from Marc Ambinder at Atlantic.com. He‘s been looking at a lot of the public polling recently and has come up with some story lines of where the consistencies are, as he calls the boundaries around the electorate.

I‘m going to put up these five and we‘ll discuss as many as we can get to.

Number one, “McCain runs better against Rs than Obama does with the Ds if you look at the recent polling.”

John Harwood, why?

HARWOOD: Why does Barack Obama run better with Rs than John McCain with the Ds?

GREGORY: No, no, no. It‘s McCain who is running better with Republicans than Obama is among Democrats.

HARWOOD: Oh, well, because there are a lot more Democrats than there are Republicans right now.

GREGORY: Yes.

HARWOOD: Look, John McCain has to run a lot better among Democrats because the Democratic pie is so much bigger. Look at the partisan self-identification (INAUDIBLE). Democrats have an advantage of 10 points or more in most polls. McCain has got to take a big bite out of that.

GREGORY: And there‘s a lot of settling out yet to be done on the Democratic side since Hillary Clinton just recently got out of the race and McCain has been the standard bearer for a longer period of time.

Number two, this is important, Rachel. It has to do with the Independents and that they are split evenly between these two.

This is the thing to watch. I was just talking to Steve McMahon, a Democratic strategist who said, “These Independents are going to be tight all the way down the line here, and that‘s going to be the real battleground.”

MADDOW: Yes. And the issue about capturing Independents, we still don‘t know if it‘s going to be sort of nonpartisan issues that capture Independents, whether that‘s the way forward in the war in Afghanistan, or whether that is something about dealing with global warming.

If there are issues that are important issues to the electorate that aren‘t seen as partisan issues, is that going to be the sort of thing that moves Independent voters? Or, are there going to be wedge issues...

GREGORY: Yes.

MADDOW: ... that really split those into Dem-leaning or Republican-leaning Independents and we see a much more traditional style campaign like we saw in 2000 and 20004?

McCain hasn‘t really gone with wedge issues yet. If he does, we‘ll know that he‘s taking a much more Rovian approach to those Independents.

GREGORY: Tony Blankley, the other issue for Republicans right now, the enthusiasm gap. Don‘t have to tell you Democrats are fired up about Obama. Less so on the Republican side, because Republicans are simply in a bad mood right now about their party and the outlook.

BLANKLEY: Yes, I think it‘s a double problem. First, there‘s a certain level of defeatism that is bouncing around amongst Republicans. I think that‘s a lesser problem.

The fundamental challenge for McCain is that he doesn‘t appeal with intensity to his base. If he tries to appeal with great intensity, he turns off his chances of reaching out to the Independents and the soft Ds.

So he has got to kind of hope that the grumbling base will stick with him at the same turnout level that you‘d expect. You are going to see a lower level of intensity. They may begrudgingly come to the polls in order to be available for the Independents and soft Ds.

It‘s a tricky line to walk. And a Republican candidate hasn‘t tried to walk that line since pre-Reagan.

GREGORY: Two more. The economy isn‘t working as well for Obama right now is an issue. He‘s looking for his voice.

And this final point. Obama is in a better position to do much better.

Steve Hayes, this is the question of who‘s got the most opportunity to be most improved. Try to answer that in 20 seconds. What do you think is going on?

HAYES: Well, I think one of the things Barack Obama is going to do again and again and again is try to tie John McCain to the current economy. I mean, it doesn‘t take—you know, it doesn‘t take a genius campaign strategist to come up with that tactic.

GREGORY: Right.

HAYES: I think they will hit Bush again and again and again and say that John McCain and George W. Bush share the blame for this economy.

GREGORY: Yes. All right.

We‘ll take another break here, come back. As advertised, some new poll numbers out on the issues, on the personalities. You‘ll want to see them after this.

(COMMERCIAL BREAK)

(NEWS BREAK)

GREGORY: Welcome back to the race. I‘m David Gregory. Happy to have you here. It‘s time to go inside the numbers. Back with us to break down the latest ‘08, this one from the “Washington Post”/ABC News poll—back with us, John Harwood, chief Washington correspondent for CNBC, political writer for the “New York Times,” Tony Blankley, syndicated columnist, Steven Hayes, senior writer with the “Weekly Standard,” and Rachel Maddow, host of the “Rachel Maddow Show” on Air America, also an MSNBC political analyst.

All right, topic number one, the head to head match up in the ABC News/”Washington Post” poll. Again, it‘s Obama on top, 48 to 42. John Harwood, you have been looking at these polls for years. There‘s two ways to look at this. He‘s had a consistent bounce. Is it a big enough bounce if you‘re on team Obama?

HARWOOD: I think it‘s reasonable bounce. I don‘t think it was quite reasonable to expect that Barack Obama would go up ten or 15 points. He‘s creeping up. He was running about even, a little behind in some polls, a little ahead, before he wrapped up the nomination. Now he‘s moving out to a six point lead. He‘s got a lot more upside that John McCain. I do think that McCain‘s success in trying to blunt Obama‘s momentum at this period is pretty critical in the campaign.

GREGORY: Tony Blankley, your experience tells you what about this question; just as we saw in the primary, there were people who wanted to learn more about Barack Obama than they did about Hillary Clinton. Is that the same position McCain is in? Is that a disadvantage?

BLANKLEY: I think Obama has a lot more upside and a lot more downside potential remains a not fully defined figure. I think McCain is going to be somewhere between 45 and 52 percent almost no matter what he does, unless he has either a meltdown or is embraced directly by god, visibly. So, the challenge for Obama is to define himself as pretty like everybody else on ideas and culture. The challenge for McCain is to define him the other way.

If Obama succeeds at the former, he‘s going to win 53, 55 percent. If he fails, he could lose at 45 percent.

GREGORY: Yes. Look at Bush‘s approval rating here. This has been consistent here, his disapproval at 68; his approval down to 29 percent. This is the interesting figure that I found: of the voters who approve of Bush, 80 percent, 80 percent back McCain. Of the voters who disapprove of Bush, 26 percent back McCain. Steve, how do you break that down?

HAYES: I think you‘re exactly right. That was one of the numbers that absolutely jumped out at me on this poll, especially the 26 number. Twenty six percent of voters who approve of George W. Bush—

GREGORY: Disapprove.

HAYES: Disapprove and support McCain. That‘s going to be, I think, a key constituency for McCain going forward through November. If you look at the kinds of people he needs to appeal to, I think he needs to appeal to conservatives. I don‘t think he‘s doing enough to appeal to conservatives. But he also needs to appeal to precisely this cohort. And the Post poll does a nice job of identifying it.

HARWOOD: David, you identified precisely the problem for Barack Obama. That pile of Bush supporters is about yay big. The pile of people opposed to Bush, who don‘t approve, is like that. This is the structural advantage that Barack Obama brings to the election.

GREGORY: Rachel, your point about this earlier, which is true; McCain has to do a lot of work here. It‘s kind of a lot of triangulation here. He wants to separate himself from Bush. He wants to keep the base. But he realizes the bigger stack here of voters is in the disapproval category.

MADDOW: Right. That number, that 80 percent number, it‘s like being told you won a rather large piece of a tiny, tiny, tiny pie. It‘s really not a lot of Americans who are on the pro-side, in terms of how they feel about George W. Bush right now. He should be winning even more than 80 percent of those voters, you would hope. There‘s two different ways to win a presidential election; you either win a large percentage of most people or you win an absolutely, devastatingly huge proportion of smaller groups of people that you patch together as a base.

John McCain, we have yet to find out who his base is going to be. Yes, a lot of this is going to be competing for the middle and competing for the independents. In order to win, you have got to turn out a huge proportion of some groups of people. Barack Obama will do that, for example, with African-Americans. With whom will John McCain do that?

HAYES: David, I think Rachel is absolutely right. This is a key point. For all the discussion we‘ve had about independent voters, and how they break, and what the issues will be; I think if John McCain doesn‘t solidify some support among conservatives and talk about the issues that matter to conservatives, all the talk of independents is going to be irrelevant. It‘s just not going to matter because it will be a tidal wave. It will a tidal wave in favor of Barack Obama.

HARWOOD: That‘s also the problem, David. I‘m not sure even Steve and Tony are in John McCain‘s base.

BLANKLEY: I‘m not sure what his base is. I‘m a conservative. I‘m going to support him, obviously, on the binary choice that I agree with him more than I agree with Obama. But the conservative base, he doesn‘t really have a base. He has some favorable attitudes in the middle. They are softly attach to him because they are not affiliated strongly with any political party. You‘ve got the soft R‘s, the soft D‘s and the independents. That moves back and forth in there. They are not as reliable as either hard D‘s or hard R‘s who are going to stick with you from the beginning to the end.

MADDOW: I would just say that I think there‘s a great challenge for being somebody with a very long Senate record and running for president. It‘s the reason we haven‘t had a senator elected president since 1960. This year, we‘re definitely going to have a senator elected president. But McCain—It‘s hard to appeal as a purist. It‘s hard to motivate people who are especially ideologically motivated when you‘ve got a 26 year voting record in Washington that can be spun all sorts of different ways.

The base to which Barack Obama appeals is going to get 95 percent of the vote, is the African-American base, that is not looking to Obama on the basis of ideology, but on the basis of identification. Sure, there‘s some ideology there. But nothing that can be debunked by his voting record the way McCain is going to have trouble with.

BLANKLEY: Look, I agree that there‘s a problem for anyone with a long voting record, like McCain. On the other hand, because he has a long record and a long public visibility on that record, Obama has to be careful not to misrepresent it too much, or he will lose his credibility.

MADDOW: You can just show it to be inconsistent, because any senator in office that long will have voted a lot of different ways.

BLANKLEY: The public has a sense of McCain. If Obama distorts that beyond the public‘s judgment, he‘s going to lose his own credibility. He has to be careful.

GREGORY: I want to move on to this other number. There‘s a couple other numbers here we‘ll just put on, but I don‘t think we need to discuss. We‘ve gotten to this enthusiasm gap business. Enthusiastic about Obama, you see it, 55 percent, about McCain, 42 percent. More room for growth there for McCain and real challenge to him. Also, more on enthusiasm, very enthusiastic about Obama, 54 percent, very enthusiastic about McCain, 17 percent.

You see the challenge there. Here‘s what interests me. The issue of Iraq—this is to a larger point—who do you trust more to handle Iraq? It‘s even, 46-47, slight edge to John McCain. Steve, if you look at that number and you‘re John McCain, do you not say, wow, I‘ve let something down here, because this should be my issue?

HAYES: No, I‘m not sure that‘s the case. I think when McCain talks about Iraq—you talk to people on his campaign—they will say, look, Iraq is about Iraq. But Iraq is also about character and it‘s also about leadership. John McCain has shown leadership on Iraq. He led on the surge, things of that nature.

This is one of the many things John McCain has to deal, where, as Tony said, the playing field isn‘t in his favor. You have a country that largely thinks the war was a mistake. I think the figure was 62 percent in this latest poll. You have John McCain having to point to this as his commander in chief issue. There‘s a natural tension there. How John McCain handles that will go a long way to telling us whether he‘s going to be elected or not.

GREGORY: Rachel, do you think voters are actually going to vote on the question of who handles Iraq best or are they going to make a judgment about the war, how we got into the war and who quickly gets us out?

MADDOW: I think voters that are going to make a decision based on who they think has good judgment about foreign policy, including Iraq. Some of that is what do you think about whether or not we ought to have started the Iraq war? Some of it is what do you think we ought to do now. Those issue issues—There‘s one of those that‘s a lot closer to—between the candidates than the other.

John McCain still needs to explain why he was in favor of the war in the first place, not just why he was in favor of the surge. Barack Obama really needs to explain where he‘s been on Iraq since he was against it in 2002. They both still have a story to tell. If they are going to present themselves, each of them, as the guy with good judgment, they both need to fill in the story for us.

GREGORY: We‘re going to take another break here. We‘ll come back with the big picture, three big questions in the campaign and some time to debates some big issues and some big differences on the campaign trail when RACE FOR THE WHITE HOUSE comes right back.

(COMMERCIAL BREAK)

GREGORY: We are back. Turning our attention now to today‘s three biggest questions coming out of the ‘08 race. Back with us here, John Harwood, Tony Blankley, Steven Hayes and Rachel Maddow.

McCain foreign policy adviser Randy Shineman (ph) called Obama the, quote, perfect manifestation of a September 10th mind set. The campaign released this statement—as you look at it, remember this is regarding Obama‘s comments after the ‘93 bombing of the World Trade Center, the ability to get some of those perpetrators behind bars. Why couldn‘t that have been done after 9/11?

The McCain camp responds with this, “Obama‘s failed approach of treating terrorism simply as a matter law enforcement, rather than a clear and present danger to the United States contributed to the tragedy of September 11th. Every American should find the mindset troubling.”

OBAMA: This is the same kind of fear mongering that got us into Iraq, that has caused us to be hugely distracted from a war we do have to fight against terrorism. It‘s exactly that failed foreign policy that I want to reverse.

(END VIDEO CLIP)

GREGORY: First question then, in ‘08, will the who‘s tough on terror debate favor the Democrats this time? Steve Hayes, in 2004 it was a different deal.

HAYES: I don‘t think it will favor the Democrats this time around, just as it didn‘t in 2004. The McCain campaign came out very aggressively on this. I was actually somewhat surprised that they did this. Just like the debate on Iraq last week came out and it was a day that both campaigns were going to devote to the economy. Today was a message on energy for the McCain campaign. I thought they would likely stick to that message to drive it home. Instead, they kept McCain giving his energy speech, but held a conference call. They have been sending out statements. They put out a statement from Rudy Giuliani.

They clearly think they are on the offense on this issue and I think they are right.

GREGORY: Rachel, as you take this question on, and whether it favors the Democrats in this debate, the back forth between McCain and Obama today, the one thing that seemed to be left out of Obama‘s analysis about Guantanamo Bay and the prisoners there is the struggle, the ambiguity of the situation of these prisoners, where they came from and what you do with them now, that any president is going to have to deal with in a very complicated way, because lawyers on both sides of this issue have been scratching their heads, saying this is a tough one.

MADDOW: As an analogy to the Iraq argument again. He‘s essentially arguing, let‘s go back to the beginning and not have done this this way in not dealing with the fact that we have done this this way. We do have secret prisons all around the world. We do have the CIA functioning as a jailer. We do have this facility in Guantanamo with all these complicated legal questions. Certainly what you do now that you‘ve created this system, how you get people out of this system, or moved into a system that is on stronger legal ground is not what this fight is about and not, I think, what either of these candidates want it to be about, because you don‘t sound particularly strong coming out and getting into the weeds on these issues, unless you stand-up strongly and say you like the current system.

I really feel like McCain went after Obama for saying he would go into Pakistan without permission, if he knew that he could get Osama bin Laden there. That was Obama signaling that he thought that he was going to be the toughest dog in this fight on terrorism. McCain thinks he has a natural advantage as a Republican on this fight. I don‘t think Obama is ceding him that ground. I‘m very much looking forward to seeing how this plays out.

HARWOOD: David, it‘s not going to be an advantage for Democrats. But what Barack Obama can try to do with arguments like he was making in that clip you just showed is neutralize the issue. This, ultimately, gets down to a matter of voters‘ gut instinct for this. In the McCain campaign, you have both his own personal track record and the partisan advantage combined.

GREGORY: I want to move on to number two here, but I do think there are two realities in this campaign. One is the bush years have given Democrats a bigger voice, a stronger voice to take on the tactics and the methods of the war on terror. There‘s also a Republican record where we have not been attacked in this country since 2001. That also is going to mean a lot to people. It will be difficult to take that away from the Bush administration, even if you attack them on the war on Iraq or on methods and techniques of dealing with prisoners. It‘s going to be a complicated and intense debate.

Let‘s move on to number two. One of Obama‘s calling cards here is that he can play across the aisle, that he has bipartisan appeal. What is that appeal? Does Obama have an actual track record, Tony Blankley, of bipartisanship?

BLANKLEY: I don‘t want to claim a comprehensive knowledge of Obama‘s record, but my impression is that he does not have a track record of challenging the interests of his own side. He challenges the interests of the Republican side. This is the argument McCain‘s making. If it‘s makeable, it‘s a powerful argument for McCain, because it goes to the very nature of how Obama describes his campaign and the reason for it, that he‘s beyond politics.

If you can show that he has the weaker record, decisively from McCain, who clearly has a bipartisan record—that‘s why he doesn‘t have base supporters, because he‘s been on the wrong side for a lot of us for many years. I think it‘s a powerful issue, if he can make it. Part of that will be advertising money, where Obama will be out-spending him two or three to one.

HARWOOD: That‘s one of the reasons he gave that speech to the African American on Sunday, though, was to provide some examples, contemporaneous examples, of him talking to people on his own side and saying you have to shape up too.

GREGORY: But has he done it in Washington? Rachel, this is the flip side of the argument that being in the Senate is a vulnerability for McCain, because he does have area‘s where he can say, whether it‘s gang of 14, campaign finance reform, other issues. Look, I‘ve done it. I have worked on the other side of the aisle.

MADDOW: In fact, he does. Barack Obama has only been in the Senate for one term. In that time, the bills that he‘s sponsored have been with people like Tom Coburn on more than one occasion. He was the guy that extended the Nunn-Lugar bill so that it wasn‘t just about weapons of mass destruction. It was also about dangerous conventional weapons like shoulder fired missiles. He did it with Dick Lugar. He has.

When you‘ve only been in the Senate one term and you‘re a freshman, you don‘t have a huge legislative record. But what he‘s got is actually extraordinarily bipartisan.

HAYES: David, I think Rachel may have exhausted the list. I think that may be it. He clearly doesn‘t have a bipartisan record. The “National Journal” survey found he was the most liberal senator.

MADDOW: Come on. Come on.

(CROSS TALK)

MADDOW: And Bernie Sanders is obviously taking it to the refs on this one and Russ Feingold too. If Tom Coburn and Dick Lugar don‘t count as reaching across the aisle because we‘re rounding that down—

HAYES: I‘m perfectly happy to count them. There‘s just two. What other examples are there. The fact remains that “National Journal” poll—you can scoff at it, if you want. Other people don‘t seem to scoff at it. I guarantee that the McCain campaign is going to be using it liberally.

MADDOW: Let me ask you though, in 2004, that “National Journal” poll, who did they say was the most liberal senator in 2004?

HAYES: I don‘t know.

MADDOW: It would be John Kerry. In both cases, I think Bernie Sanders was really—

GREGORY: Quick comment here because I want to get—

BLANKLEY: The Nunn bill was not a big partisan fight. McCain, on the other hand, is was paired up with Kennedy, with Feingold. He picked on the Democratic side on great fight, great partisan fights.

(CROSS TALK)

BLANKLEY: No, but it‘s not a big bill.

GREGORY: Let me wedge in here. The third question, John Harwood, your take on it in 20 seconds, desperate to drill, where are the votes in the oil debate, John, quickly?

HARWOOD: There are blue collar votes to be had in this debate, for a candidate to say we have to do something different, because you‘re paying more than four dollars at the pump. That‘s who McCain is talking to today.

GREGORY: Final moments here, your turn to play with the panel. Back with us, our panel tonight, John, Tony, Stephen and Rachel.

Daniel in California writes this: “wouldn‘t it cover all bases on the part of Senator Barack Obama to accept Senator John McCain‘s town hall meeting invite, provided McCain accepted an invite to do a college tour with Obama. Then it couldn‘t be said that Obama declined a challenge.”

John, where do we stand on these joint appearances?

HARWOOD: The problem with that is that John McCain would say yes, and Barack Obama doesn‘t want to have so many joint appearances with John McCain. They are going to have some. But John McCain is the underdog. Underdogs always want more mono a mono exposure with the other side. Barack Obama is going to ration out what he give him. My guess is they will have two of them before the conventions, but there‘s not going to be ten like John McCain has asked for.

GREGORY: Why take that position even now? It‘s kind of a front runner position. Why take that at this stage?

HARWOOD: Because he is the front-runner. He believes that he‘s going to be even more of a front-runner as he consolidates the party, cashes in some more of those advantages as we get deeper into the summer. I think he doesn‘t want to—I do think the Obama campaign is confident about themselves appearing alongside John McCain. They are going to make the calculation that we‘re ahead, he‘s behind. He is the one who needs to catch us.

GREGORY: All right. Lynn writes in with this question: “if the Republicans are serious about going after Michelle Obama, how do they think the Clinton women, female supporters, who they seriously want to court, will react, and how will it affect their vote?”

Rachel, you said all along, it‘s tricky business going after a candidate‘s spouse in a very personal way, if it doesn‘t have to do with a policy position.

MADDOW: Yes. And so far—I mean, I don‘t expect that John McCain‘s campaign is going to levy serious fire at Michelle Obama. I don‘t sense that that‘s the kind of campaign they want to run. I believe them when John McCain says stuff like that. If the campaign does get involved in that, they are going to have to be very, very narrow in the way they lay down that fire, because it can‘t look sexist, especially if he‘s going to keep making explicit appeals to women voters and to dissatisfied Hillary Clinton voters.

HARWOOD: Hey, but Rachel, the issue there would not be sex, it would be race.

MADDOW: How do they make that clear? They are going after an African-American woman. She is no more black than she is female. If women see it as an attack on her on the basis of her gender, they can expect a backlash for looking sexist. Certainly, there will be a backlash too if she‘s appeared to be gone after on the basis of her race. That plays out very differently in this race.

HAYES: Look, there‘s no Republican plan to go after Michelle Obama because of her race or because of her gender. If Michelle Obama says things that offend Republicans and conservatives, they will criticize them. They‘ve done that before. She said that America was down right mean. They criticized it. She made the comment of not being proud of her husband. Those are things that are naturally going to be criticized.

I don‘t think Republicans aren‘t looking for ways to go after Michelle Obama. But when she says things that are controversial, she should expect that Republicans will criticize them.

GREGORY: What she said she had never been prouder of her country than she was with the support thrown behind her husband, Barack Obama, in this campaign. With women more generally though, Steve and Tony, as McCain tries to court those Hillary Clinton supporters, the fuller record of McCain on issues that women may care about, whether it‘s abortion or Supreme Court justices, issues that tie into each other, become a more difficult record to defend, no?

BLANKLEY: McCain will not get the single issue, pro-abortion voters. He‘s lost those. Abortion is an ambiguous issue for about 40 percent of the voters. They may be softly for it or softly against it. I don‘t think McCain‘s record there is a killer for those people for whom that is one of several issues.

HARWOOD: Tony is exactly right. When we look back at the end of this campaign and try to explain why women voted the way they did, abortion is definitely not going to be at the top of that list. Economy, Iraq are going to be there.

GREGORY: All right, we‘re going to leave it there. Thanks to a great panel tonight. You can play with the panel every weeknight here on MSNBC. Just e-mail us at
Race08@MSNBC.com. We take your calls as well at 212-790-2299. We leave you with the poignant pictures today from St. Albans here in Washington, where our leader and friend, Tim Russert, is in a temporary spot. There‘s been a public wake today. The president and other Washingtonians have been coming through all day long. The support of our viewers and those in the community have been a tremendous source of strength. Thank you. “HARDBALL” next.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END

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